Comments

Taxing Jill to pay lazy Jack is untenable, agreed.But distributing Corporate Jill's dividends to pay lazy Jack should be untenable too, for the same reasons.The problem with leftist moochings is their stubborn laziness to realize that entrepreneurs work as many hours as employees, and on top of that they risk their hard earned share capital in the business. What would be their motivation to succeed in their businesses knowing that profiteering bloodsuckers will live on their back?Alike Hitler and Mussolini back then, current populist parties all over Europe share the relentless motto of stigmatizing savers (propertied rich, totally unbiased) as if they were mass criminals plotting to crush the poor defenseless lazy.Once savers have been publicly criminalized, it is totally justifiable to expropriate their wealth for the common. Again Jill to pay Jack.The CCD would amount to multiply welfare state under a different denomination, more crowding out for each dollar saved, and less dollars saved for productive investment. Also the proceeds of the UBD would be a fraction of what is needed to fund a universal rent.

I suggest other viable and fair policies.Rain or shine, welfare state will have to be funded by printing currency (inflation). So print more currency to pay for universal rent (more inflation). At least the lazy will not live on other people's back and merit.Or else, severely curtail entitlements. The lazy starving poor will have no other choice than wake up early in the morning and go to work.Or else, apply Malthusian policies to restrict population growth. Ideally, as in "brave new world", birth of lazy profiteers would not be socially desirable (read allowed).

The great Varou joke: "what is the moral basis for denying all children the same advantage?" Heil Varou the Equalizer! It's not moral basis but fate what puts children in different families. With background come advantages and disadvantages. You can't choose. Babies born in rich families are not guilty for the advantages that come with it.Equalizing all members of society is just killing society as we know it. Himmler created an equalized squad called SS, whose objective was to be the model for the future German society.Equalizing destroys merit, creativity, freedom, culture, and so many other valuable things.Varou and the current army of European knuckleheads (populists) want to equalize us all, but at the poor's level. Unsuccessful crowds are out to get the skin of successful "criminals".Mr Varoufakis should get a decent job and cut off with Mussolini era policies.

Mr. Varoufakis’ case for putting in place a universal basic income becomes even more compelling when you look at his funding structure. A UBI program would be a capital-intensive project, which would be strenuous for any government budget. So why not meet a public need through squeezing a little from the profitable private sector? Instead of directly taxing the corporates (a political minefield), Varoufakis’ subtle route to capturing valuable shares from newly floated IPOs is intelligent. Yes, the commons do have a right to access the capital gains from a private corporation. In the US, this is viable since IPO shares tend to trade at very high prices and that the pie of corporate wealth is large enough to afford substantial slices to more people. However, I doubt this plan will have any currency in the current political climate of Republican control over the executive and legislative branches of government. Read more

Start enforcing the tax laws already on the books, including clamping down on offshore tax havens. Stop handing out absurd benefits (including full, fat early retirements) to government employees. Change the tax laws to eliminate loopholes, including carried interest in the U.S. and basis step up on death.

Then talk to me about taxing the returns on the capital I formed by setting aside part of my after-tax wage income. Read more

Interesting, but wouldn't capital simply punish governments for undermining their profit margins by investing money elsewhere? So we would still come back to the old question of...who owns the means of production. Read more

“A universal basic income is liberty’s main prerequisite”. Oh, how interesting. I thought liberty was about freedom of choice or the unalienable right to the pursuit of happiness? “Returns on capital” are not a tax? Since when not a tax, if confiscated by a government? “The commons have a right to a share of the capital stock, and associated dividends” – this unimaginative thought could not have been set forth better by either Marx or Lenin! And we now, finally, have a “new understanding of liberty and equality”, but from where, I might ask? From the left, of course, since where else would it come from? And then, how could anyone object to “the moral basis” of a trust fund for everyone. The moral basis? How about objecting on the “economic basis”? There is no economic basis underpinning this absurd idea. Here is the lesson for the country that implements this incredibly foolish, leftist idea – watch as the productive companies who will absolutely object to this government confiscation and dilution of the rightful ownership, watch as they move to another country that is NOT trying to destroy itself in the name of Progressivism. I cannot wait to see how the New-Marxism fails as badly of the old Marxism did.Read more

Articles proposing a UBI are not UBIquitous as the inevitable increase in inequity that will be brought about by automation looms. Those who deny that such a shift will occur are either ignorant or overly optimistic.

This is an interesting idea for funding a UBI. Having been through a couple of IPO's, the quite frankly insane profits reaped by upper management and most especially the investment bankers seem a good source to fund such a scheme, while still leaving those individuals free to buy private islands and helicopters. Is it fair to effectively tax those folks? Life isn't fair. And typically, it will be the entrepreneurs and enabling capital provides that profit from the destruction of labor, so it's probably fairer than most ideas.

Ideally a more complex approach would leverage the shares from IPOs that were most likely to cause wage loss. Although, in reality managing that would most likely be a disaster.

Also I'm not convinced about UBI and the motivational effect on society. I'd far prefer to see some sort of quasi-governmental great works programs available to individuals that would provide income in exchange for working with the needy, improving infrastructure, etc. Read more

There is little that connects me a Mr. Varoufakis but on this issue I concur. I believe that the social fabric will rip if we don't create something like the universal income. Already in 2002 I made the case for paying mothers a salary with retirement benefits and full social cover for the work they do on our kids. Its a job and they contribute incredibly to society. How many creatives would be free to pursure their hearts if they had material security - with benefit to society? I am not at all a leftie but I recognize a good thing when I see it. Read more

Lawrence Kramer's comment about funding via money printing is good. It is reminiscent of social credit theory:https://en.wikipedia.org/wiki/Social_credit"Douglas proposed to eliminate the gap between purchasing power and prices by increasing consumer purchasing power with credits which do not appear in prices in the form of a price rebate and a dividend. Formally called a "Compensated Price" and a "National (or Consumer) Dividend", a National Credit Office would be charged with the task of calculating the size of the rebate and dividend by determining a national balance sheet, and calculating aggregate production and consumption statistics."Read more

If the universal income can be funded ( I believe that it is possible), why not give that income in exchange for some work o service instead for nothing?. If jobs can not be created by private firms, public work ( in education, health, security, cleaning services, etc. that nobody can say that are not needed) should be created by goverments to unemployed people . Work shoud be a right, otherwise people is pushed to delinquence, margination or black market and everybody will be impacted for that Read more

Yanis Varoufakis is absolutely correct in calling for a universal basic income. We are heading towards a future in which it will not be necessary or desirable for everyone to be in the official, paid workforce. One way or another we will have to allow a dignified living to those doing unpaid work and those without marketable abilities and skills. Simply increasing taxes on workers and businesses incomes to pay for this is unlikely to be acceptable to the community without something in return and the capital tax Yanis proposes is really no more than a corporate income tax by another name. There is an alternative. If the wage is genuinely universal and if an appropriate minimum wage for paid work is maintained, employers could then only be required to top up the pay of their workers. Having gained a reduced wage bill, businesses may then be more inclined to accept an increase in tax, perhaps in the form of a sales or turnover tax. Any shortfall could be covered by taxes on land, on gifts and on inheritances. Read more

Lawrence Kramer's comment about funding via money printing is good. It is reminiscent of social credit theory:https://en.wikipedia.org/wiki/Social_credit"Douglas proposed to eliminate the gap between purchasing power and prices by increasing consumer purchasing power with credits which do not appear in prices in the form of a price rebate and a dividend. Formally called a "Compensated Price" and a "National (or Consumer) Dividend", a National Credit Office would be charged with the task of calculating the size of the rebate and dividend by determining a national balance sheet, and calculating aggregate production and consumption statistics." Read more

The description of the wrong done to the poor is quite correct. The description of the remedy targets the wrong thing. Tax bads, not goods (capital or income), and hit the shared natural resources that are the birthright of all of us, not the benefit of individual labor or enterprise. Otherwise, basic incomes will be swallowed up by increased rents of all sorts: "the landlord [nowadays often the bank] is the robber who takes all the rest." Read more

If Vaaroufakis wants a more equal capital income distribution he should look at property and natural resources. They earth belongs to all its living creatures, thus those who claim to 'own' a parcel of the earth should have to pay a rent for it instead of 'owning' it and privately reaping the economic gain. Read more

The good professor has his hat on backwards. Governments do not create wealth; they consume it.

And if robots are replacing people, the answer is not to enable governments to steal shares from risk-taking entrepreneurs when they conduct an IPO

If this goofy idea is ever effected, then it will merely be a form of creative welfare that will discourage those who receive it from seeking work and disincentive those whose IPO proceeds were snatched by an avaricious government from producing wealth

The proper answer is less people. There are already too many people on this planet, and most are unproductive Read more

This proposal has a name. It's called the corporate income tax. In the US, say, where the federal tax rate is 35%, it goes as if the government had a 35% stake in all US companies. So what's new in the funding proposal? Note also that even a much higher corporate tax will fall far below what is required to fund a decent universal basic income. Read more

part of the solution the author is looking for seems to be already available: any government can decide to default on its debt, passing part of its cost to the creditors and not leaving it only to the taxed workers. If we really wanted to update our systems, we could start by doing what already is feasible and insist at the same time to reach our dream. Declaring only the dream without courage to do reach what is already available seems nothing more than cheap populism. Read more

For whom?A) Per country? B) Per planet?If A, just look what happens to Europe now. Any country with UBI would be an obvious aim to get there for all of Africa/Arabia. So, it will not work.

Remains B: The total GDP per capita is about 1.300 $/month, hardly cool for the US or EU, but certainly paradise for many. Why on earth would everybody in US/EU share *all* of the GDP with the rest of the planet? Read more

I hate to point this out, but no one in the world is now prevented from obtaining a capital dividend income. The problem is in the developed world very few people seriously make efforts to accumulate capital- through savings, working extra hours or jobs for the purpose. Even people right now could accumulate small sums regularly if they wanted to, or weren't prevented from doing so by welfare regulations. Most forms of welfare benefits impose a huge tax on earning money over the welfare limit- generally a loss of benefits on a dollar for dollar basis. Also, many people prefer a current benefit, new TV, new phone, eat out, etc. to saving a few bucks every week or month.The only people who don't have this opportunity are mainly subsistence farmers/hunter gatherers, and some folks with serious handicaps that prevent them from doing any gainful employment.

The government(s) could help this process along by encouraging people such as Mr. Buffet or Mr. Gates to make charitable contributions people who are struggling to accumulate some capital, rather than funding charities that mainly try to do something for others by giving away "stuff" of one sort or another or "doing something for the poor" rather than helping poor people from doing form themselves. This kind of active private capital redistribution would require some creative rules to make it both viable and keep the control out of the reach of government bureaucracies. Read more

Good thoughtful paper. Perhaps to be considered in combination with Controlled Money Printing by each Central Bank to finance the essential operating budgets of states and reduce the tax burden on all individuals >???? Read more

With work at good wages becoming more and more an issue and science, especially robotics/computers doing more and more work, finding a solution to the every growing population needs becomes an existential problem.

Of course if this capital allocation model were used it should become universal at the outset, not merely new firms. And there would be a need to allocate according to where the wealth/profits are generated so allocations can be made to many countries. And, And, And, this becomes a thorny allocation issue itself.

Then we have many issues of how non work helps the psychological well being of peoples.... perhaps the share allocated should include some "work" done by the receiver at some point for some public good. This is a nice, juicy issue set, much better than the class warfare issues of today. Read more

Why limit the UBU funding to public IPOs? Give the UBI fund 3% of all shares issued, private and public, and thus 3% of all dividends paid. Plus 3% of all share buybacks. Dividend income tax would be reduced by an equal amount of the UBI payments. Read more

Or better yet, give the UBI fund, "phantom" shares of all capital stock; phantom shares not being true shares with voting rights, merely an economic interest in dividend payments or share buybacks. Read more

A corporate income tax by any other name. Only, this one comes with voting power. (Does it?) Reminds me of Dr. Johnson's description of going to sea: like being in prison, but with the chance of drowning.

And, it's unnecessary. IF a UBI is a good idea, then it does not need to be funded by revenues of any sort. It can be funded by simply printing the money and letting the abundant supply on which the notion is based - the excess production that would create the profits that would create the dividends - simply absorb the newly created demand.

The sea change that makes the whole idea of a UBI work is the near-zero marginal cost of production of so many things. Consequently, the tax to "fund" the UBI should be payable by the time-tested tax we call inflation. That result is achieved by giving people money to buy the outputs. In many cases, the average cost of production might actually fall, with the result that, in the aggregate, inflation won't happen. So there won't be a tax.

The only reason to tax in any form - including by entitling a public depository to dividends - is to prevent government spending - and the UBI IS government spending - from crowding out the private use of resources. Unless too much money chases too few goods, there is no inflation. The premise of Prof. Varoufakis's argument is that "too few goods" is no longer a problem. If so, then there can't be too much money, at least not at the level he is proposing to distribute it.

I do not disagree with Prof. Varoufakis's central argument. We citizens, by our good conduct and respect for the laws under which things come to be made and the profits owned by capitalists, HAVE contributed to the productive effort and should be compensated for our forbearance from insurrection. The more production our good behavior enables, the greater that compensation should be. Until recently, that compensation could be handled through the wage channel, as most citizens were ACTIVELY involved in production, and their passive contribution could be incorporated into their wages. Now, with globalization and, more important, automation, more and more of us will be contributing only passively. So the compensation channel for that element needs to change. The "dividend" makes sense, but printing money that can be spent at ANY business, not just IPO'd corporations (unless you're just trying to get the Koch Bros. to go along) is the simplest and most direct way to get the job done. Anything else would be eyewash. Read more

Lawrence Kramer's comment about funding via money printing is good. It is reminiscent of social credit theory:https://en.wikipedia.org/wiki/Social_credit"Douglas proposed to eliminate the gap between purchasing power and prices by increasing consumer purchasing power with credits which do not appear in prices in the form of a price rebate and a dividend. Formally called a "Compensated Price" and a "National (or Consumer) Dividend", a National Credit Office would be charged with the task of calculating the size of the rebate and dividend by determining a national balance sheet, and calculating aggregate production and consumption statistics." Read more

Rather than capital income it should be rent income. Rather than a single guarantee it should be numerous different fundings from the social surplus of worthwhile activities, such as art, music, sports,research, planting trees. The philosophical purpose can be served by varied institutions acting in varied ways and it is better that way. The philosophical purpose is to share the surplus to nurture life.Caveats need to be added for which there is no space here. Read my books Read more

The flaw in the funding (as other readers pointed out) lies in the IPO bit. Every corporation over a certain size should be subject to:

1. A worker dividend.2. A worker veto vote on certain types of decisions.3. A social dividend (which is what you refer to)4. A social veto vote on certain types of decisions.

In return, the corporation gets a business license to sell in that area. This does not preclude importing and exporting it just puts society back in control of the monster they have created (the corporation).

It also does not make it uneconomical as the extra dividends circulate back into the local economy stimulating overall demand which the corpoation will share in benefits of.

It is also not communism - it responsible capitalism as opposed to the aristocracy style capitalism that currently prevails. Read more

UBI is excellent idea! It gives much needed rest to working part of society tortured by excessive contractions of crony capitalism, gives equality to all individuals regardless of sex and race, enables the possibility of grass root reform of educational system, provides possibility of quality control of capitalistic systems, empowers society to be able to stand against tendency of subduing serialization. It refines almost every aspect of human life and enables the usage of seriously quality methods of social development.UBI provides new incentive that Quantitative easings could not. It is a sign of a new age, the age where possibility of production far overreaches possibility of consumption, the age where profitable redistribution of goods and services does not follow logic of greed any more. Read more

I like your general idea. However just 'taxing' IPO's is not very democratic in respect of all other corporate structures (e.g. privately owned, LLC's, etc.) that also make use of public resources. In addition there's the problem of how to determine who to pay the dividends from the start of such a fund. Let's not forget that to make it Universal every world citizen should have the right to the UB Dividends and a large portion of world citizens do not even own a bank-account. However a stepped, fully scalable approach could be to implement on a town/city level with any proven deposits into the fund fully deductable from citizens town taxes, in all areas where such taxes are being collected. Read more

The Goenchi Mati Movement (Disclosure: I am a member) in Goa, India is arguing for a capital income differently. They argue that minerals are usually a part of the commons, owned by the state as trustee for the people and especially future generations. Further, minerals are inherited assets, so we are only custodians over them in our lifetimes. So if we sell our minerals (by mining), we must ensure that we receive the full value (sale price - extraction cost, or economic rent) of the mineral, save the entire amount in a new "non-wasting" asset - a Permanent Fund is a common solution, and any real income (after inflation) be distributed only as a commons dividend, equally to all as a right of ownership. The Citizen's Dividend is required to connect the individual to the mineral commons. The insistence on capturing full value is that calculations show losses of 95% of the value over an 8 year period - this is a simple loss to future generations. Also, since most governments account for mineral receipts as revenue, it is usually not saved, a further loss to the future generations. The Movement also argues that if money is given to the government either at the extraction stage or at the income distribution stage, it is nothing but a hidden per-head tax. It is the kind of tax that cannot be legislated - it will be too unpopular. Interestingly, there is a Goa Iron Ore Permanent Fund, which has been created as the result of a public interest litigation by Goa Foundation (Disclosure: I am a member). However, it does not yet achieve all that the Movement is seeking. The elections are in Feb 2017, and the Movement is endeavouring to make this a key issue. Read more

The captains of industry, financiers,bankers , neoliberal politicians and economists seem to assume that everyone else is as obsessed with money as they are themselves, Quite failing to notice neither that having themselves made far more than they need, serves only to increase their thirst for more, so that they would not lose their own motivation should they be receiving a UBI , nor that most people are more interested in the services they are performing, their patients they are treating, the pupils they are teaching, the things they are making or repairing and the social contact that these activities bring than they are in money. There has to be enough, but fulfilment for most of us comes from the satisfaction of participating and contributing to our society, and most of us would want to continue to do so whether we needed to financially or not. In fact the most damaging aspect of unemployment is not the paucity of the benefit , or even the humiliations typically imposed on applicants , but the message unemployment carries that society has no use for you, you have no contribution to make, no opportunity to participate. I agree there should be UBI , but I disagree that it should be in conjunction with any social security benefits, it should be sufficient to replace any and all of them. It should be the mechanism by which new fiat money is introduced into the economy and the money supply then managed in the same variety of ways that reseve banks have traditionally operated to reduce the money in circulation when necessary , once upon a time.Cheers David J S Read more

Your view of the luddites is an interesting take on the situation considering that is the view most of us are trying to put forward when we become populist voters and yet have been deemed uneducated and incompetent. Globalisation along with technology is a way to improve our lot but when they are used as tools [weapons] against each other then it is time to think again.

Your paper is really only a continuation of the same with a minor adjustment here and there. Human nature the way it is now and from history can be used to predict what the outcome will be. Human nature is in our DNA, today’s economics and politics are not.

Where this will end is anyone’s guess and there are many trying to make their mark but most if not all are really just a window dressing exercise. Can we continue on the same trajectory when you take into account the world’s population, the environment and our attitude to rampant consumerism?

The best tool that can be had at this time to put us on the same page would be an education system that is free to all participants as @Forrest Henslee mentions in his comment below.

Maybe a better use of your UBD would be to build and maintain a wall of schools.Read more

This is a pretty stupid idea. People is California will end up owning Google, the French will own Peugeot or Renault , while Greeks and Italians will own insolvent banks. And then everyone will be screaming to tax Google and get a piece of Google, and no one will be close to nurturing a Google in their country. Read more

Within the existing Monetary system where Central Banks essentially control money AND it's 'value' a UBI inside there system will still benefit the rich and will NOT change the imbalance of Power... but this will EarthVote.org/common-planet.html Read more

A UBI is only necessary if the value of nearly all human labor drops to zero, as a result of AI Robots or otherwise. But this will almost certainly never happen.It is true that if human labor is not a factor in the creation of any goods or services desired by humans, then allocating these goods and services based on human labor, makes no sense. For example, it would no longer improve efficiency or produce equilibrium.In that case, some other allocation method such as UBI might make sense.But even if robotics and AI expand the sphere wherein human labor is valueless, there will exist a vast sphere where human labor is the primary measure of value.For example, in agriculture, a sphere where human labor is nearly valueless and shortly (100 years) will be, a new artisnal food industry is emerging where value is mostly a function of how little robots play in its production. This pattern will emerge in every other sector , so that eventually we will have a 'robot' sphere in which traditional goods and services 'cost' zero, and a human sphere where human labor content is the dominant trade-able factor. Essentially all economic activity will take place in the 'human' sphere where i will trade my artisnal mushrooms for your artisnal poetry, and a tiny fraction of that income will be used to buy goods from the robot sector. Again, this is precisely what currently happens in nearly roboticized sectors like agriculture. Virtually everybody works outside the agriculture sphere and uses a tiny fraction of income earned there to buy food. We even provide a type of ubi in this sector through food stamps, because food is now so cheap. (i realize its not zero, but that is because of non roboticized inputs such as transport and energy).Activity in the human sphere will define income, arguably in ways that are even more morally pleasing to Yanis and others, because such intrinsically non-robot activities like art, poetry, emotive caring, acting etc will be the most highly valued. The need for a UBI in this case is not clear, or it will be so cheap that no additional taxes will be necessary. In any event we are still a long way from that day.Let's not screw it up by imposing a new tax on the intellectual capital that will make this a reality.

Think about the end state here - the sort of society we would have if true artificial intelligence eliminates all need for work. To me, the central requirements are that such a society takes care of everyone, and that it does not destroy the planet through mindless consumption of every resource in sight. The way to achieve both goals is through a market in which everyone has a fixed income and in which prices are charged for everything proportionate to the resources required. I think we should be moving towards such a society now, although we also still need to allocate based on labour. That is why I support something like Dr. Varoufakis' idea, although I think a negative income tax scheme would be better than a basic income. At first, it would only distribute money to the poorest, and would therefore require lower tax levels to finance. Read more

I completely agree that prices in what i call the 'robot' sphere would be mostly determined by resource constraints and i agree that owners might be able to extract rents from that , without offsetting value creation (ie, discovering minerals, etc). I think there are two ameliorating factors. First we have discovered that very few resources are highly constrained, and to the extent they are , it is mostly because of the cost of labor to utilize them (think drilling for oil in the Artic). So the value and therefore rent associated with all this should decline with the price of everything else. Second, ownership is diluted and distributed over time by taxation, especially inheritance taxation. So over time these assets would come to be held as capital assets by people earning income and saving in the 'human' sphere, which is of course exactly what we do now.Obviously, there could be truly pathological situations and rent seeking , for example where someone holds a patent on the AI, but even patents last only 20 years and are then shared with society.I am not all suggesting the absence of rent seeking in such a society, and your points are perfectly valid. I was merely suggesting that we will still have a labor based system for allocating resources, as a result of continued existence of economic activity in the 'human' sector. If this is true, the need for a UBI allocation system may be less urgent.

PS, i certainly hope you are correct that the AI miracle happens sooner than later, ( assuming the doomsayers are wrong).Read more

Interesting idea, but I'm not quite convinced. For one thing, I think that true artificial intelligence could be fairly close, and that it will profoundly change our economy.

What would still have value? Not just artisanal products, but things that are in limited supply like land, minerals, and energy. I am afraid we could get a world where a few people own such things and trade the goods and services produced by them among themselves, leaving everyone else to try to subsist on artisanal things as you suggest. Prices might not be as low as you suggest because people would be getting paid for these limited inputs. Could be a very unequal world, for no good reason. The justification we have for inequality today is that it motivates effort. But what if effort is no longer needed?

I think we need some mechanism to distribute the wealth machines produce fairly. People can then produce artisanal products if they like, but their wellbeing should not depend on it. Read more

As usual a telling analysis of the issue. But would would there not be a more elegant solution? Perhaps a form of seigniorage tied to overall productivity growth, for example, would allow a central bank to finance capital income without resort to state ownership or, its sister, taxation. Read more

Conceptually the idea of all citizens having a common stake in economic growth is far more attractive than the unpopular psychology of taxation and redistribution. However, we can anticipate huge problems in practice, as companies would find ever more creative ways to evade the system. Already far too much economic investment is financed from debt (which creates financial instability) rather than equity (where investors carry the risks), and your proposal would push even further in this direction.

Although more mundane, I believe the key emphasis should actually be on policies to dramatically reducing the basic cost of living for the poorest. By making it possible to have a healthy life on a much lower level of income we can alleviate poverty, but still maintain strong incentives for work. A list is easy to compile from any household budget :

Policies to promote affordable housing in areas where employment is available (including rent controls and subsidised housing where necessary)Investment to provide free public transport, including free access to centres of employment.Replacement of regressive taxes (such as UK council tax) with taxation based on wealth or incomeInvestment in “passive-house” standards to eliminate household energy billsPolicies to deliver low-cost healthy food options in local communities (eg. community farms?) Free universal healthcare and education systems

A safety net will still be required, but the problem becomes more manageable if the basic cost of living is reduced to a fraction of what we are forced to pay today. In rich countries this also has a positive effect on the price of labour. It never ceases to amaze me that economists who are very concerned with Global competitiveness never comment on the fact that the cost of housing in the UK is on average 50% higher than that of our nearest competitors in Germany or France. Why not tackle this problem first, both to alleviate poverty, and to give UK businesses a better chance of competing in the Global economy? Read more

That government is always inefficient is a myth often perpetuated by the corporate owned press. This is evidenced quite often when public assets are privatized and prices go up. To argue that this is because they must earn ROI is a moot point from the end user's point of view. Read more

The mathematics needed to square the accounts - May fall considerably short of expectations that UBCD is Great Insurance for lifetime.Perhaps revalidation and backtesting may provide a result - that can be surprisingly refreshing.And Stock Portfolios alone may not suffice - Real Estate Investment Trusts REITs can supplement.Finally, the proposition needs perfect timing - @ The Embarkation stage in European Economics design.Not after the horses have bolted. Read more

Taxation does not fund fiscal spending - that is what we know from Modern Money Theory. Taxation is a monetary policy tool to meet interest rate targets and control bank reserves. Fiscal policy is itself a form of 'public capital' that effects a distribution among the population via public services, exchange rate modulation and monetary policy. It is quite wrong, on the other hand, to talk about appropriating a share of private capital for public services and benefits. That is superfluous in any event given the power of a sovereign treasury and the potential expansiveness of public wealth, but would also be a counter-productive interference with private property. I think UBI or something like it is probably necessary and far preferable to the cumbersome, inadequate and poorly administered income support or replacement schemes currently on offer. These are all new ideas and very strange to most of us, but at this stage, I think Job Guarantee, or what Keynes referred to as Employer of Last Resort, would be a better idea than UBI for several reasons, including concerns about inflation and also yes linking wages to productive activity, as appealing as the idea of expanding the population of creatively idle flaneurs might be . Read more

I would rather see society focus on guaranteeing every individual meaningful work and the skills to do it. It's beyond my scope to say whether a "universal basic dividend" could fund that. Ideologically though, I'm believer in the New Deal's CCC approach.

I'm suspicious of the basic income approach. Who decides what a "basic income" is? And in what way does that approach serve to moderate capital's incessant demand for growth at the expense of the planet and what's left of our habitat? Read more

The idea behind the proposal for a universal basic dividend is excellent. But though Mr Varoufakis is against funding it from tax, his proposal would amount to a tax on IPOs. The right way to realize the idea is through linking money itself to a global equity standard - what I call the Ikon - as described here http://www.themoneytrap.com/the-ikon/. In this way everybody holding money anywhere would gain when productivity and wealth, which as the author points out are collectively produced, increase. For once, Mr Varoufaskis is not radical enough. Read more

Re Peter Lynch's comment, thank you. How would the Ikon standard provide a UBS?That calculation was intended to fix the initial price of the Ikon in terms of dollars. Thereafter the Ikon should be fixed against an index of equities. This would stabilise the general level of equities in terms of money. Systematic or monetary risk, which adds uncertainty to investment decisions, woud be eliminated. Prices and wages would adjust. With rising productivity, assuming that is reflected in equity values, the real value of the monetary unit would rise, as prices fell faster than wages. This would give holders of money a universal income (yield) without taxation, as well as promote real long-term capital investment by removing monetary sources of uncertainty. Read more

Robert Pringle, your system is based on the Ikon – defined as one trillionth of the total market value of all shares quoted on the world’s recognised stock markets (approx. $50 trillion at end-2012, so one Ikon=$50). But if the value of the Ikon is the value on the market in other currencies and the value of the other currencies is based on the Ikon, don't you have a circular argument going? Read more

It seems that Varoufakis don't understand that money today is created out of thin air by machines (a computer click). The problem is that money creation by private banks (96% of the circulating currency) is not accounted for in their books in the cash flow account at the time of creation. In this way, all the electronic money daily in use is not taxed as profits once it come back to the banks and thus cannot be redistributed (it possibly ends up in off-shore accounts held by 'nominees'...). We must audit the accounting for money creation so as to find the means - the seigniorage withheld by the banks - that are very much needed to establish a universal basic income. In October 28, 2016 I was at the shareholder meeting of Mediobanca Group in Italy asking for an audit of the bank's books to find out how much money they created in the past fiscal year. The CEO Alberto Nagel answered to me that he don't know how to fabricate a balance sheet that include electronic money creation... It is big time for an audit of money creation so we can understand that the Quantitative Easing can be done for people too. It is time for helicopter money before the big bosses take an helicopter to escape further scrutiny. Read more

There is a Greek say (English Translation): "Live for today, tomorrow may never come". Poor old Greece, it has Turkey to the East, Albania to the North, Italy to the West, the influx from the South, all seismic activities from underneath, corruption from within, and the cherry on the pie, the watchful eyes of " The Quartet" from above. In such a crowded space, even the Greek Gods had to flee, migrate, long time ago.... Read more

Well argued, wonderfully clear - too bad I can't share it with friends who need convincing on this subject. Are diminishing translations (and videos by the way) due to funding problems? If so, let's have a drive for donations. Read more

Define work.If I'm tapping on my keyboard now at my place of work am I working?Was I working earlier when I was doing Maths with my kid and then taking him to school?I felt as much dignity in both these endeavours. One, I believe, has greater value, but it is the other for which I'm paid more. Read more

The underlying problem is very simple indeed; a lack of available equity capital, particularly on free enterprise terms, that will allow anyone at the grass roots level to compete against any existing employer. What needs to be recognised is that the underlying problem is a demonstration of lack of competition for the potential employee. Once you introduce sufficient access to equity capital and thus competition for the employee, the only way to gain access to an potential employee for your business is to raise their income and or improve their terms of employment.

Everyone has failed to recognise that it was competition for a potential employee that forced employers to raise the terms on offer to attract an employee from another employer or out of welfare. Today, welfare is very big business for executive governments; who do not have any interest in competition for their own in house services.

Until we accept the need for agreed rules, mechanism and institutions to deliver that competitive free enterprise equity capital investment, right down at the grass roots, we will never bring back prosperity for an entire nation. Read more

Nice article. And Varoufakis is right, perceptions of fairness are important, though it's fairly easy to come up with funding sources that everyone will agree are fair. For instance, central banks could capitalize sovereign wealth funds with the bonds they have acquired as part of QE programs. Similarly, capital income and capital itself are vastly undertaxed when compared with earned income in most developed countries. So, funding can be arranged, if guaranteeing a basic income is seen as a good use of funds. Read more

This article resonates with a general concern about taxation as a possible solution. Income tax only applies to income - which is not a tautology, it's a problem because the definition of "income" is a problem. Warren Buffet published his 2015 tax numbers, and he paid just under $4 million in state and federal taxes. Deductions before tax included just over $3 million in allowable charitable donations. Meanwhile, in 2015, Buffet made another $2.85 billion in charitable donations that were not set off against tax. He can afford to do that; his charitable giving completely swamps his income tax and completely bypasses the government. And Buffet is one of the "good guys". Any income tax change will only address future income. It will do nothing to reduce the vast unearned wealth already in the hands of the rentiers, extracted from the public by deception and manipulation of property and financial markets. Read more

You have to learn to walk before you can learn to run. A tax on 'return on investment of shareholders and landlords' would be a relatively minor change compared to change the entire ownership rules.

Ultimately, ownership of super-size assets should be returned to common society ownership on death or retirement of the entrepreneurs to created them. They created them so they should be entitled to the fruits of their labour during their own lifetime. But their Children should not be entitled to them other than a million or two e.g. the Koch brothers.

The problem with the above is that if people tried for that now it would be chaos. The elite would see it as a money grab and would exercise there considerable power to stop it. Not stopping short of starting their own 'black ops' which makes people who threaten them magically disappear.

No, to change the entire ownership rules it would have to be done slowly and responsibly with very broad support from almost all people otherwise it would degenerate into complete chaos. Read more

This kind of progressive thinking has been gradually building for over a hundred years now. The problem is not that it won't work, the problem is change. Human beings are hard wired to resist change at all costs unless they have no other choice. It is a survival instinct just the same as when someone twirl a piece of grass in your ear you go berserk.

In manufacturing businesses, one can often achieve a 40% cost saving by retooling their production to a lean production model (quick setup times but lower throughput machines). Most firms cannot adopt this change because it requires a change in thinking and a change in the way they work. In other words they perceive it as very risky. It is also counter intuitive to the general business philosophy of big throughput machinery which bring down the cost per unit.

The only firms who can successfully adopt these lean manufacturing practices are typically those who have no other choice, they had to try them or go out of business for sure - Porsche is the classic example.

So what is needed is a major crisis, and 2008 was not that crisis because the money pumped into the system prevented a depression, thus wasting a good crisis. Fortunately, or perhaps unfortunately, most of the run-of-the-mill professors who write in this forum say we are due another big crisis. Maybe this will be the tipping point in the same way that the French revolution was the big tipping point moving from Aristocracy to Democracy. Read more

Well, that is the thing in economics and politics, it is 98% marketing. In the UK they asked people to vote for policies of parties without knowing who they are: The Green party won by a country mile. But in the actual elections they get like 1% of the vote. Marketing.

http://www.independent.co.uk/voices/comment/if-people-voted-for-policies-the-green-party-would-win-the-next-election-9887199.html Read more

PS On Air: The Super Germ Threat

NOV 2, 2016

In the latest edition of PS On
Air
, Jim O’Neill discusses how to beat antimicrobial resistance, which
threatens millions of lives, with Gavekal Dragonomics’ Anatole Kaletsky
and Leonardo Maisano of
Il Sole 24 Ore.

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